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India Equity Research Reports, IPO and Stock News
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Wabco India has reported Net Sales of INR 2754 mn, up by 15.3% YoY & 13.3% QoQ. PAT at INR 390 mn, was up by
13.3% YoY & 3.6% QoQ. EBITDA margins at 16.1%, contracted by 382 bps YoY & 183 bps QoQ due to higher than
expected COGS & other operating expenses. We introduce FY14 estimates & roll-forward our valuations by 12
months and recommend a "HOLD" on the stock.
Results in-line with estimates
WIL reported net Sales of INR 2754 mn, up by 15.3% YoY & 13.3%
QoQ. PAT at INR 390 mn was up by 13.3% YoY & 3.6% QoQ. Although
margins was below our expectations, lower than expected tax
resulted in in-line profits. WIL derives ~71% of its revenues through
OEM segment, 15-16% through replacement markets and 13-14%
from exports. WIL posted revenue growth of 16% in FY12 & has
been able to outperform M&HCV segment growth of 8% in the
same period.
Contraction in EBITDA Margins
EBITDA margins at 16.1%, contracted by 382 bps YoY & 183 bps
QoQ. This was largely due to higher than expected cost of goods
sold in Q4FY12, which was up by 238 bps YoY & 312 bps QoQ.
Other operating expenses were also up by 79 bps YoY & 21 bps
QoQ. In FY12, WIL reported EBITDA margins of 17.84%, down by
225 bps YoY. We expect margins to expand by 112 bps to 18.95% in
FY14E, on the back of favorable sales mix.
Expansion Plans
WIL is expanding its capacity of its 100% EOU, located at
Mahindra World City by incurring a capex of INR 400 mn, which is
likely to commence operations in Q1FY13. WIL exclusively uses
this unit to cater to the needs of WABCO plants globally. We expect
May 25, 2012 RESULT UPDATE - Q4FY12
exports to register a CAGR of 35% over FY12-FY14E. WIL is also
looking for establishing a new assembly plant in Lucknow to serve
customers in North India. It has already purchased land and
expects this capacity to come in by FY13.
New products lined up
WIL plans to develop and launch lift-axle control system and
foot-brake valve with integrated switches in the Indian market
and design and develop hydraulic-brake booster and a series of
valve devices for North American OEMs by mid of 2012. We
believe with introduction of more technologically advanced
products in the Indian market, WIL will continue to expand its
content per vehicle.
Outlook & Valuation
We expect M&HCV sector to register a CAGR of 12% over
FY12-14E, resulting in sustained growth for WIL. WIL is a
globally preferred vendor for Daimler for supply of braking
& control systems and will be one of the beneficiaries of
Daimler's operations in India starting from FY13. We expect
WIL's revenue & profit to register a CAGR of 23% & 26%
respectively over the next two years. We recommend a
"HOLD" on the stock with a target of INR 1677 in 18 months
at 10xFY14E EV/EBITDA.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Wabco India has reported Net Sales of INR 2754 mn, up by 15.3% YoY & 13.3% QoQ. PAT at INR 390 mn, was up by
13.3% YoY & 3.6% QoQ. EBITDA margins at 16.1%, contracted by 382 bps YoY & 183 bps QoQ due to higher than
expected COGS & other operating expenses. We introduce FY14 estimates & roll-forward our valuations by 12
months and recommend a "HOLD" on the stock.
Results in-line with estimates
WIL reported net Sales of INR 2754 mn, up by 15.3% YoY & 13.3%
QoQ. PAT at INR 390 mn was up by 13.3% YoY & 3.6% QoQ. Although
margins was below our expectations, lower than expected tax
resulted in in-line profits. WIL derives ~71% of its revenues through
OEM segment, 15-16% through replacement markets and 13-14%
from exports. WIL posted revenue growth of 16% in FY12 & has
been able to outperform M&HCV segment growth of 8% in the
same period.
Contraction in EBITDA Margins
EBITDA margins at 16.1%, contracted by 382 bps YoY & 183 bps
QoQ. This was largely due to higher than expected cost of goods
sold in Q4FY12, which was up by 238 bps YoY & 312 bps QoQ.
Other operating expenses were also up by 79 bps YoY & 21 bps
QoQ. In FY12, WIL reported EBITDA margins of 17.84%, down by
225 bps YoY. We expect margins to expand by 112 bps to 18.95% in
FY14E, on the back of favorable sales mix.
Expansion Plans
WIL is expanding its capacity of its 100% EOU, located at
Mahindra World City by incurring a capex of INR 400 mn, which is
likely to commence operations in Q1FY13. WIL exclusively uses
this unit to cater to the needs of WABCO plants globally. We expect
May 25, 2012 RESULT UPDATE - Q4FY12
exports to register a CAGR of 35% over FY12-FY14E. WIL is also
looking for establishing a new assembly plant in Lucknow to serve
customers in North India. It has already purchased land and
expects this capacity to come in by FY13.
New products lined up
WIL plans to develop and launch lift-axle control system and
foot-brake valve with integrated switches in the Indian market
and design and develop hydraulic-brake booster and a series of
valve devices for North American OEMs by mid of 2012. We
believe with introduction of more technologically advanced
products in the Indian market, WIL will continue to expand its
content per vehicle.
Outlook & Valuation
We expect M&HCV sector to register a CAGR of 12% over
FY12-14E, resulting in sustained growth for WIL. WIL is a
globally preferred vendor for Daimler for supply of braking
& control systems and will be one of the beneficiaries of
Daimler's operations in India starting from FY13. We expect
WIL's revenue & profit to register a CAGR of 23% & 26%
respectively over the next two years. We recommend a
"HOLD" on the stock with a target of INR 1677 in 18 months
at 10xFY14E EV/EBITDA.
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